The ultimate estimate is little modified from the preliminary studying as France’s manufacturing sector noticed a modest soar in exercise to spherical off the 2025 12 months. A robust rise in new export orders was the important thing cause in underpinning sentiment whereas employment circumstances additionally returned to progress on the month. In the meantime, output volumes additionally got here
near stabilising after November’s sharp and accelerated contraction. HCOB notes that:
“2025 closes on a surprisingly upbeat notice. Enterprise circumstances in France’s manufacturing sector improved in December,
with the PMI climbing again above the expansion threshold to achieve its highest degree in three-and-a-half years. Whereas this could
not obscure the structural challenges of latest years, it’s nonetheless a step in the correct course. Trying forward, the sector
may gain advantage from large-scale orders in defence and aerospace, significantly from overseas, as export demand has already
proven better resilience than home orders in latest months. Nonetheless, persistent political instability and the ensuing
uncertainty amongst companies and households stay key headwinds for future prospects.
“After a number of months of contraction, manufacturing at French manufacturing crops broadly stabilised in December. Sturdy
export orders have been a key assist, at the same time as stress on provide chains and cautious buyer behaviour proceed to restrict
output. Firms have additionally been assembly orders by drawing down inventories. Buying exercise, which has been
declining since 2022, is now approaching stabilisation, probably signalling that the sector might have reached its trough
heading into subsequent 12 months.
“The modest enchancment in enterprise circumstances has prompted companies to lift costs once more after three consecutive months of
cuts, seemingly geared toward stimulating gross sales. Enter price inflation stays subdued, offering some aid, however margin pressures will
persist if demand fails to strengthen additional.”
